GM won't share capacity with Peugeot

EXCLUSIVE!

The recently formed GM and Peugeot alliance will see the two companies sharing platform technology and parts-purchasing joint ventures. This alliance could include shared production across the globe as well. However, in an exclusive interview with Autocar India, Timothy E. Lee, GM’s president of international operations, says his company’s India operations don’t have spare capacity to share with Peugeot. “We have ambitious plans in India and if we sell in the numbers we are planning to, we are going to be pretty much full up.”

GM has a capacity of 1,40,000 units at its Talegaon plant where the Spark and Beat are currently produced. Around 79,000 of these hatchbacks were sold last year. Assuming these sales figures are maintained this year, GM will have a spare capacity of just 61,000 units for three future models – the Sail (hatchback and saloon) as well as the Enjoy MPV, to be produced from Talegaon.

Peugeot had announced in January its decision to put on hold the Rs 4,500-crore investment plan for a new plant in Sanand, Gujarat. The next best option for a cash-strapped Peugeot struggling to raise investments in India would be to share a common facility with its new alliance partner. But, with GM indicating that it will not share capacity, Peugeot doesn't have this option and will have to re-evaluate its Indian project.